﻿<p>
  The Fama-French 5-Factor model comprises two more factors:
</p>
<ul>
    <li>RMW (Robust Minus Weak) measures the excess returns of firms with high operating profit margins over those with lower profits.</li>
    <li>CMA (Conservative Minus Aggressive) measures the excess returns of firms investing less over those investing more.</li>
</ul>

<p>
  RMW was proposed by Novy-Marx (2013) who wrote that:
  "Controlling for gross profitability explains most earnings related anomalies, and a wide range of seemingly unrelated profitable trading strategies." CMA was proposed by Fama and French (2014).
  The article pointed out that: "A five-factor model directed at capturing the size, value, profitability, and investment patterns in average stock returns is rejected on the GRS test, but for applied purposes it provides an acceptable description of average returns." Finally, momentum is another commonly used factor. It captures excess returns of stocks with highest returns over those with lowest returns
</p>
